Startup of the Week: WorldRemit

Ismail Ahmed (Pictured) is the founder and CEO of WorldRemit.

Saturday, November 8, 2014

advertisements

Ismail Ahmed setup WorldRemit after becoming frustrated with the inadequacies of traditional players in the remittance industry. The Somali-born London School of Business MBA graduate routinely sent money home to his family, often at a high cost and with little flexibility. He went on to work at the United Nations Development Programme (UNDP) to help tackle fraud and compliance issues in the remittance industry, and became a whistleblower after uncovering corruption in the UNDP Somalia Remittance Programme. He supplied information on how the corruption could prevent remittance companies from complying with international regulations on money laundering and the funding of terrorism.

WorldRemit is Ahmed's answer to all the problems he saw -- it's a low-fee digital service designed to be totally transparent. "I realised that there was a possibility to move from the agent model of money transfers to an online one, reducing costs and also removing the risk of criminality associated with cash pay-ins," he tells WIRED.co.uk. "WorldRemit lets people send money where they want, when they want, how they want. That means more than 110 transfer destinations, with the ability to send from a computer, smartphone or tablet, and receiving options that include bank deposit, cash pickup, Mobile Money and airtime top-up. That kind of convenience and choice has been missing from money transfers up until now." According to WorldRemit, the service enables digital remittances in twice the number of countries as competitors Western Union and MoneyGram.

Founder: Ismail Ahmed
Launched: 2010
Headquarters: London
Staff: More than 100
Funding: $40m (£25m) Series A funding from Accel Partners in March 2013 on top of $7.5m (£4.7m) seed funds from friends of London Business School

What problem do you solve?
The money transfer industry is one of the last to be affected by the internet revolution. Consequently, many people still walk to high street transfer agents, often carrying cash, in order to send money abroad. And even though the old system inconveniences the customer, the fees they pay are often unreasonably high. WorldRemit is a more convenient, and typically lower cost option.

By offering transfers to Mobile Money services and airtime top-ups, WorldRemit is also helping the world's unbanked population -- many of whom are getting access to financial services for the first time through their phone.

How do you make money?
Customers are charged a small fee per transaction

How would you sum up your company ethos?
We understand the difference that money transfers make in the lives of real people --whether they are for health, education or general living expenses. WorldRemit believes that sending money should be fast, simple and fairly priced. By taking an offline industry online, we are able to achieve those goals for the benefit of all our customers.

What pushed you to stop talking about launching a startup to actually doing it?
The idea for changing the money transfer industry had been in my head for a long time, having experienced the expense and inconvenience firsthand. Years after the internet had revolutionised other industries, such as travel and shopping, this particular financial service remained largely untouched by the financial revolution. I came to realise that the person who was going to make that happen was me.

How has the business developed?
WorldRemit's growth has accelerated significantly since receiving funding from Accel Partners in March 2014. There has been a significant expansion of the range of countries where customers can send money to and from -- having grown from 35 send markets at the start of the year to more than 50. The company now offers money, Mobile Money and mobile airtime top-up transfers to more than 110 receiving countries.

What has been the most challenging time for the company?
There are many challenges associated with building a global network of partnerships that works seamlessly for customers. That's an ongoing challenge that we relish. In common with many rapidly-growing companies we also have to work hard to ensure that we maintain and develop our own culture and that everyone who works here understands where the company is heading.

How do you help ensure that?
We are investing more time and energy in communicating internally -- ensuring that everyone knows when we are launching new product offerings, that they understand our longer term vision and also, crucially, making sure that staff get to know each other socially.

Do you have any advice for dealing with potential investors?
Honesty at all times. There is no point in trying to exaggerate positive aspects of your business or sugar-coat any shortcomings. Being completely up-front means there will be no surprises further down the line. Also, you may find that your investors are able to help you solve a particular problem -- after all, you are seeking their expertise as well as their money.

What is the best piece of advice anyone has ever given you?
It's not so much good advice that has shaped my experience, but criticism. Encountering people who don't believe in your vision and say that your business will never work is a powerful motivator to succeed.

Which business person do you most admire and why?
Steve Jobs was an incredible businessman because he was so closely involved with the end-product and had phenomenal attention to detail. He also had the ability to see where human behaviour and technology was heading. It was as if he was able to look slightly over the horizon, beyond the scope of everyone else's vision.

What is your biggest barrier to future success?
There are no insurmountable barriers, but there are things that could take more or less time to come to fruition -- for example the popularisation of Mobile Money services. Transferring money to these is a rapidly growing part of our business and something that we have put a fair amount of energy into. The potential userbase is billions, but the rate of uptake in the developing world is still hard to assess, although we do know that the active userbase doubled between 2012 and 2013. Regardless, we still offer other forms of money transfer --so our business is growing quickly, irrespective of this particular technology.

Where do you see the company in five years?
As a business I would hope that we would be bigger, with many more satisfied customers. In terms of our product offering, I expect that to evolve with the times. We will certainly be sending a lot more money to mobile devices, in one form or another, most likely to Mobile Money services running on smartphones. But we are open to new technologies. We'll be guided by the needs of our customers and whatever receiving method works best for them.

What more do you think regulators could be doing to help solve the problems you saw while working at the UN?
There is a school of thought that the money transfer industry will sort itself out and that the arrival of companies such as WorldRemit will drive fairness and higher standards. However, there is still a lot of anti-competitive practice around the world, where some companies force money collection agents into exclusivity deals, then charge excessive fees. This is where regulators need to be more active. A number of international bodies such as the G8 and World Bank have spoken out on this issue, but it is at a national level that action is needed.

Why did you choose to setup the company in London?
London is well placed to lead in global fintech because it is that much more focussed on "rest of world" solutions. Sending remittances to Mobile Money, where there are hundreds of systems that lack interoperability, would not be seen as a top priority in Silicon Valley or New York. The mindset of the London FinTech scene, the availability of talent, the language and many other factors made London the natural place to set up the company.

What do you think the landscape of the payments industry will look like a decade from now?
Currently only a small fraction of the $550 billion (£347 billion) annual global remittances are sent online. We expect this to grow to 30 percent in the next three to four years and for WorldRemit to be leading the way.

Home
Email

Hiiraan Online